Legislation and jurisdiction
Development of antitrust litigation
How would you summarise the development of private antitrust litigation in your jurisdiction?
The Netherlands has traditionally been seen as an attractive jurisdiction for bringing damages claims in competition cases. In recent years, several (interim) judgments have been rendered in ongoing private cartel damages cases in the Netherlands. These rulings concerned issues such as pre-trial hearings, preliminary questions to a higher court, jurisdiction, the validity of assignments of claims to claims vehicles and the use of the ‘passing-on defence’. The application and interpretation of these issues has gained somewhat in clarity thanks to these judgments; however, several aspects remain as yet unresolved. Example cartel cases that have led to follow-on actions for damages in the Netherlands are: Air Cargo, Trucks and Cathode Ray Tubes.
Are private antitrust actions mandated by statute? If not, on what basis are they possible? Is standing to bring a claim limited to those directly affected or may indirect purchasers bring claims?
Private antitrust actions for damages are mandated by statute, and both direct and indirect purchasers as well as any other party with sufficient interest can bring a claim.
If based on statute, what is the relevant legislation and which are the relevant courts and tribunals?
Directive 2014/104/EU (Antitrust Damages Directive) was implemented into Dutch law in 2017 through an implementing act, supplementing the existing general rules on tortuous liability in the Civil Code (CC) to create a specific (but non-exclusive) statutory basis for actions for damages based on breaches of competition law in article 6:193m(1) of the CC. In addition to this, the general rules on tort (article 6:162 of the CC) and unjust enrichment (article 6:212 of the CC) can also apply.
Unlike administrative proceedings against decisions of the Dutch Competition Authority (ACM) for which the Rotterdam district court has exclusive jurisdiction, private antitrust litigation under civil law is not assigned to any specialised competition law court. Private competition damages actions must be brought in first instance before the district court that has territorial jurisdiction (see question 5).
In what types of antitrust matters are private actions available? Is a finding of infringement by a competition authority required to initiate a private antitrust action in your jurisdiction? What is the effect of a finding of infringement by a competition authority on national courts?
With regard to cartel cases, claimants benefit from the legal presumption (introduced in implementation of the Antitrust Damages Directive) that a cartel causes damage. For any type of breach of the competition laws laid down in articles 101 and 102 of the Treaty on the Functioning of the European Union committed by multiple undertakings, the CC provides for joint and several liability for the undertakings involved in the infringement. No previous finding of an infringement is required. Stand-alone cases before the Dutch courts are a common phenomenon, especially in regard to vertical restraints and abuse of dominance.
In addition to these provisions, a claimant can bring a claim for damages for any type of competition-law infringement, based on the general rules governing tort. Other types of actions, such as seeking a declaration that an agreement is null and void owing to incompatibility with the competition rules, or seeking a declaration that the defendant has abused its dominant position, can also be brought by private claimants. However, in regard to any claim other than a damages claim against a cartel, the claimant does not benefit from a legal presumption that the infringement has caused damages.
Findings of infringement by the European Commission are binding, insofar as pursuant to article 16(1) of Regulation (EC) No. 1/2003, the Dutch courts cannot find against a final decision of the European Commission. The implementation of the Antitrust Damages Directive has also resulted in the introduction of a statutory provision declaring definitive decisions by the ACM to be formally binding.
What nexus with the jurisdiction is required to found a private action? To what extent can the parties influence in which jurisdiction a claim will be heard?
Where it concerns companies established in the European Union, international jurisdiction is governed by Regulation (EU) No. 1215/2012 (Recast Brussels I Regulation). Based on the Regulation, the Dutch court has jurisdiction if the defendant is domiciled in the Netherlands or if the harmful effects of the unlawful conduct have occurred, or may occur, in the Netherlands.
In additon, the Dutch courts have jurisdiction with respect to claims against a defendant based in another EU member state, if one or more of the co-defendants in the case are established in the Netherlands and the claims are so closely connected that the cases should be heard and determined together (article 8 of Regulation (EU) No. 1215/2012). It should be noted that for companies established outside the European Union, the Code of Civil Procedure (CCP) provides for the same rule of jurisdiction as article 8 of Regulation (EU) No. 1215/2012.
It is fairly common for defendants that are held jointly and severally liable for damages to also start third-party proceedings before the same court in the Netherlands.
Can private actions be brought against both corporations and individuals, including those from other jurisdictions?
Concerning the possibility of bringing damages claims against parties established in other jurisdictions, see question 5. The statutory basis for damages claims based on competition-law infringements taken up in the CC with the implementation of the Antitrust Damages Directive only concerns undertakings. However, based on the general rules on tort, a damages claim may be brought against an individual (employee or executive) too, provided they can be held personally liable. In practice, we have seen no legal actions against individuals in competition litigation cases to date.
Private action procedure
May litigation be funded by third parties? Are contingency fees available?
Dutch law does not contain limitations on third-party funding of litigation. The Dutch Bar regulations prohibit attorneys from having a financial interest in a client’s claim, which means that, as a general rule, contingency fee arrangements are not available for Dutch attorneys (although it is generally permissible to make fee arrangements that are to a limited extent outcome dependent). It should also be noted that lawyers that are not, or no longer member of the Dutch bar, are not subject to this prohibition and are therefore free to work on the basis of contingency fee arrangements. However, they have no right to appear in court but should in turn involve a member of the bar.
Are jury trials available?
Jury trials are unknown in the Dutch judiciary system.
What pretrial discovery procedures are available?
Dutch law does not provide for a general right to discovery. The court can, however, by injunction, order a party to disclose or provide certain documents if another party to the proceedings submits a reasoned request to the court. A request to this extent can be submitted during a procedure or before commencement of a procedure. The requesting party will need to first substantiate that it has a legitimate interest in obtaining or accessing the documents. The documents must, furthermore, be sufficiently specifically described, and must relate to a legal relationship between the parties in question (eg, a claim for breach of contract or a claim for damages based on a tortuous act). Note that these three conditions are interpreted restrictively by the court where it concerns actions for damages in cartel cases. With regard to documents from the Competition Authority’s file, the relevant provisions from the Antitrust Damages Directive have been implemented in Dutch law, limiting the possibilities to obtain such documents and limiting the evidentiary value of such documents.
What evidence is admissible?
There are in principle no limitations as to the form in which evidence is provided, although in some cases the law or the court may specify otherwise. Parties in competition cases often submit economic expert reports as evidence. When faced with conflicting reports from the disputing parties or otherwise faced with issues requiring a certain expertise, it is possible for the court itself to also appoint an expert, without being bound to such an expert’s opinion.
Legal privilege protection
What evidence is protected by legal privilege?
Documents, both physical and digital, which constitute correspondence with an attorney, are legally privileged. With respect to investigations by the ACM, this includes all correspondence with attorneys admitted to the bar (including in-house lawyers). However, correspondence with in-house counsel is not privileged if the in-house counsel in question is not an attorney admitted to the bar. For investigations by the European Commission the rule, as established in the Akzo case, applies: only correspondence with external attorneys is legally privileged, correspondence with in-house counsel is not.
Trade secrets or other commercially sensitive matters are not always protected from disclosure. Whether commercial confidentiality constitutes a legitimate reason not to provide a certain piece of evidence will be assessed by the court on a case-by-case basis. It is important that parties are given the opportunity to give their views on all materials brought into the procedure (honouring the principle that both sides to the dispute should be heard). ‘Confidentiality rings’ provide an option to protect trade secrets while also enabling disclosure of the information to the parties to a procedure. This entails that the court imposes an obligation of confidentiality on the parties to the procedure that receive the information. Such ‘confidentiality rings’ have, however, in practice, not been applied much in competition damages actions. We note that a legislative proposal for implementation of Directive 2016/943/EU in Dutch law is currently pending review before the Senate and will likely enter into force in the near future. The new legislation will implement the Directive’s specific provisions on the protection of know-how and trade secrets.
Are private actions available where there has been a criminal conviction in respect of the same matter?
Infringement of the competition rules is not a criminal offence under Dutch law.
Utilising of criminal evidence
Can the evidence or findings in criminal proceedings be relied on by plaintiffs in parallel private actions? Are leniency applicants protected from follow-on litigation? Do the competition authorities routinely disclose documents obtained in their investigations to private claimants?
Because infringement of the competition rules is not a criminal offence under Dutch law, evidence or findings in criminal proceedings will normally not play a role in private antitrust litigation in the Netherlands. Leniency applicants are not granted immunity for follow-on litigation, but leniency statements are protected from disclosure in the context of follow-on litigation. The Implementing Act has introduced specific provisions in Dutch civil procedural law exempting leniency statements and statements made in the context of a settlement from the possibility to request disclosure of documents (see question 9).
Stay of proceedings
In which circumstances can a defendant petition the court for a stay of proceedings in a private antitrust action?
The Amsterdam Court of Appeal has decided in the Equilib case, a follow-on procedure regarding the Air Cargo cartel, that the fact that a European Commission enforcement decision is being challenged before the EU courts does not necessarily mean that the national follow-on proceedings need to be stayed. The court interpreted the European Court of Justice case of Masterfoods to mean that a national proceeding only needs to be stayed if and to the extent it concerns questions of fact or law, the answer to which depends on the validity of the European Commission’s decision. There must be reasonable doubt that the European Commission’s enforcement decision is valid. To substantiate this, the party requesting stay of the proceedings needs to:
- prove that it has appealed the European Commission’s decision on time;
- substantiate that it, in the proceedings before the EU courts, reasonably contests the decision of the European Commission; and
- set out the defences that it intends to raise in the national proceedings, in order to allow the national court to determine whether and to what extent the assessment of those defences raised in the national proceedings is dependent on the validity of the European Commission’s decision.
The court can also stay proceedings in actions for damages for a maximum of two years if parties are involved in out-of-court settlement procedures in relation to the matter in question.
Standard of proof
What is the applicable standard of proof for claimants? Is passing on a matter for the claimant or defendant to prove? What is the applicable standard of proof?
The burden of proving submissions and allegations in principle lies with the party who relies on them. The burden is therefore on the claimant to reasonably substantiate its claims and arguments in the writ. The claimant will have to prove:
- a breach of competition law;
- the existence and amount of the damages; and
- a causal link between the wrongful act and the damage suffered.
The standard of proof for an allegation of fact is to show that the allegation is ‘plausible’.
In follow-on actions, the burden for claimants to prove a competition law infringement is fairly low, because the enforcement decision by the European Commission or ACM constitutes proof of the infringement. However, in stand-alone procedures, where claimants cannot refer to an administrative enforcement decision finding an infringement, claimants frequently have difficulty in sufficiently substantiating their claim. This also applies if they extend the scope of their claim (in terms of duration, products covered of otherwise) beyond the scope of the infringement as established in the underlying decision of the competition authority.
Damages proceedings are normally divided into two stages in the Netherlands. First, a claimant seeks a declaratory judgment to the effect that each defendant is (jointly and severally) held liable with regard to the claimant in question for all damaged caused by the infringement to which it was a party. The threshold to obtain such declaratory judgment is fairly low; in order to succeed, the claimant must demonstrate that it is likely that it has suffered any damage. The second stage is a separate procedure in which the quantification of the damages is dealt with (unless the court has already obtained all information needed for a decision on the amount of damages in the first stage). Claimants benefit from the (rebuttable) evidentiary presumption laid down in the CC through the Implementing Act, which establishes that a cartel is presumed to cause damage. This does, however, not relieve claimants from the burden of having to substantiate the amount of damages they are claiming. It is also possible for the court itself to set a presumption of facts or reverse an existing burden of proof if it finds this is required for reasons of reasonableness and fairness.
The burden of proof for facts underlying specific defences on which a defendant can rely, such as the passing-on defence (see also question 35), lies with the defendant.
What is the typical timetable for collective and single party proceedings? Is it possible to accelerate proceedings?
The duration of private antitrust proceedings is variable and to a large extent determined by factors such as the level of complexity of the case, the schedule and workload of the court, and the procedural attitude of the parties involved. Therefore, whereas the average duration for civil commercial proceedings in first instance lies around one to two years for complex, multiparty cartel damages cases involving international parties or foreign legal systems, this could extend to up to five years. Another important factor that may delay a procedure’s duration is whether procedural incidents (eg, the impleading of third parties or motions for joinder) are raised. In order to plan the procedural aspects of a case, case management hearings may be organised at the request of the parties or at the initiative of the court itself.
What are the relevant limitation periods?
A limitation period of five years applies for bringing a damages claim for breach of competition law under Dutch law, both for claims based on the statutory basis for private antitrust actions introduced by the Implementing Act, and for claims based on the general rules governing tort. The limitation period for follow on procedures generally starts to run on the date after the day that the European Commission or other competition authority publicly announces its decision to impose fines. For other procedures, the first day of the limitation period is the day the claimant becomes aware of the damage and the person liable for it, but not before the infringement has ceased to exist.
In order to interrupt and renew the limitation period, parties can send a notice letter. The five-year limitation period can, however, not be extended or renewed beyond the absolute limitation period of 20 years, calculated from the date on which the damage occurred, regardless of whether the injured party is aware of the damage. The limitation period can also be extended if a competition authority takes investigative or procedural action with respect to the competition infringement to which the damages claim relates, with the time needed for closing the procedure, increased with one year.
What appeals are available? Is appeal available on the facts or on the law?
A judgment by a district court in civil cases can be appealed to the court of appeal that has territorial jurisdiction. The court of appeal will exercise a full review of questions of fact and law. A subsequent judgment of the court of appeal can then be appealed to the Supreme Court in The Hague. The Supreme Court reviews the matter on questions of law only.
Are collective proceedings available in respect of antitrust claims?
Collective proceedings for private competition litigation are possible in the following ways:
- Multiple claimants can jointly bring a legal action for damages in their own name.
- Parties with an interest in a pending case can request to join the proceedings (article 217 of the CCP).
- Claimants can assign their claims to a claims vehicle, after which the claims vehicle brings the legal action under its own name. A common structure for this in the Netherlands is the assignment of individual claims to a claim vehicle against a deferred purchase price expressed as a percentage of the damages ultimately awarded.
- Associations or foundations that act as representative bodies can litigate on behalf of injured parties (article 3:305a of the CC) (this type of collective action is applied in Cathode Ray Tubes, Trucks and Libor). Normally, such representative bodies will seek to obtain a declaratory judgment as a basis to then negotiate a collective settlement. Although it is not possible for such representative bodies to claim damages in court proceedings, pursuant to the Dutch Collective Settlements Act 2005, the Amsterdam Court of Appeal can declare, at the joint request of the parties, a collective settlement binding on all injured parties, with the exception of parties that opt-out within the required certain timeframe.
Are collective proceedings mandated by legislation?
See question 19.
If collective proceedings are allowed, is there a certification process? What is the test?
For a claim by representative bodies to be admissible, it must follow from the representative body’s articles of association that it represents the interests of the injured parties on behalf of which it brings a claim. In addition, the claim must sufficiently warrant the interests of the injured parties represented by it. The (non-binding) Claim Code lists more specific requirements:
- the representative body must meet certain criteria on governance, financing and representativeness;
- representative bodies must have an internal supervisory body;
- they must have sufficient experience and expertise; and
- they must maintain a publicly accessible web page with relevant information.
For the court to declare a collective settlement initiated by a representative body binding on the injured parties, it must further be assessed whether the intended settlement is reasonable in terms of amounts payable and other conditions.
Have courts certified collective proceedings in antitrust matters?
Most collective proceedings in private competition litigation have so far been based on assignment of the claims to a claims vehicle. In the follow-on procedures to Cathode Ray Tubes and Trucks, a representative body has been established. In Trucks, the only court decision with respect to this representative body so far relates to a procedural point regarding the possibility to organise a pre-trial hearing (Stichting Aequitas Belangenbehartiging / DAF cs, Amsterdam District Court, 29 March 2018). The admissibility of the Consumentenbond, a Dutch consumers’ association, has, however, been debated in respect of a damages claim in Cathode Ray Tubes and, in a recent judgment, the court found the association to be admissible in its claims (De Consumentenbond/Philips, Amsterdam District Court, 29 March 2018). Moreover, it should be noted that the admissibility of representative bodies has been assessed in the context of numerous collective actions outside the field of competition.
Opting in/ out
Can plaintiffs opt out or opt in?
For a collective settlement pursuant to the Dutch Collective Settlement Act (see question 19), an opt-out system applies for injured parties. For other types of collective actions in the form of joinder of proceedings or assignment of claims to a claims vehicle, injured parties must opt-in to be a part of the proceedings.
Do collective settlements require judicial authorisation?
Collective settlements through a representative body pursuant to the Dutch Collective Settlement Act (see question 19) must be declared binding by a court in order to be binding for all injured parties. Collective settlements on the initiative of parties, without binding effect on those injured parties not involved in the proceedings, can be reached among the parties themselves and do in principle not require judicial authorisation.
National collective proceedings
If the country is divided into multiple jurisdictions, is a national collective proceeding possible? Can private actions be brought simultaneously in respect of the same matter in more than one jurisdiction?
National collective proceedings pursuant to the Dutch Collective Settlement Act (see question 19) in order to obtain a settlement binding for all parties must be brought before the Amsterdam Court of Appeal. If multiple private actions are brought simultaneously before different district courts in respect of the same matter, the proceedings may be referred to one of the district courts in order to avoid deviating judgments (eg, this recently occurred in follow-on proceedings in Trucks).
Has a plaintiffs’ collective-proceeding bar developed?
There is no plaintiffs’ (or defendants’) bar in the Netherlands (in the sense of specialisations); however, some law firms are increasingly specialising on bringing collective damage claims in competition cases.
What forms of compensation are available and on what basis are they allowed?
Claimants who have incurred losses as a result of a violation of competition law can be awarded damages. Damages are compensatory and based on claimants’ actual losses (in terms of additional costs and foregone profits). Alternatively, claimants may claim reimbursement of payments unduly made and, or compensation for undue enrichment.
Where the action concerns an agreement that is found to violate competition law, the agreement can furthermore be declared void in whole or in part. Courts can also provide a remedy by issuing an injunction, which, if necessary, can be imposed subject to a periodic penalty payment.
What other forms of remedy are available? What must a claimant prove to obtain an interim remedy?
On the request of the claimant and provided that the claimant can show urgency (a low threshold in practice), courts can provide an interim remedy by imposing an injunction until a final judgment is rendered in the matter. A defendant can, for example, by injunction, be ordered to stop the allegedly unlawful practice. Injunctive relief can be obtained during a procedure on the merits or through preliminary relief proceedings. Injunctions can be declared immediately enforceable, regardless of whether the judgment has been appealed. On the other hand, only in exceptional cases may there be room for awarding an advance payment of all or part of the damages claimed in the main case by way of an interim measure.
Are punitive or exemplary damages available?
Exemplary or punitive damages are not available, as damages are meant to be compensatory and based on claimants’ actual losses. However, despite not yet being applied in practice in antitrust damages cases, courts may set the amount of damages corresponding to the level of extra profits realised by the defendant as a result of its anti-competitive conduct.
Is there provision for interest on damages awards and from when does it accrue?
For the payment of damages, statutory interest accrues after the expiration of the deadline for payment. For cases based on tort, payment is due from the date the damage can be claimed (ie, the damage has been incurred).
Consideration of fines
Are the fines imposed by competition authorities taken into account when setting damages?
Any fines imposed by competition authorities are not taken into account in determining the amount of damages to be awarded, based on the principle that damages are compensatory and based on the damage the claimant actually sustained. However, damages already awarded through redress schemes are taken into account in the calculation.
Who bears the legal costs? Can legal costs be recovered, and if so, on what basis?
In principle, the ‘loser-pays’ rule applies, meaning that the party winning a court procedure can recover its legal costs from the losing party. However, the compensation for legal representation is set at a fixed amount that normally represents only a limited part of the actual costs incurred.
Joint and several liability
Is liability imposed on a joint and several basis?
Save exceptions for small and medium-sized enterprises (SMEs) and successful immunity applicants, undertakings are jointly and severally liable. Under certain circumstances, an SME’s liability can be limited to its own direct and indirect purchasers. The liability of successful immunity applicants with regard to contribution in relation to the other defendants is limited to compensation of the damages of its own direct and indirect purchasers and suppliers in proportion to the extent to which circumstances attributable to the immunity applicant have contributed to the damage.
Contribution and indemnity
Is there a possibility for contribution and indemnity among defendants? How must such claims be asserted?
Dutch tort law provides for an obligation for parties that are found jointly and severally liable for compensation of damages to contribute equally to the compensation amount, unless the circumstances of the case require the contributions to be distributed differently. This provides a basis for contribution claims among defendants. The rules for contribution for defendants who have received immunity with respect to fines for a competition infringement and for defendants who have entered into settlement with claimants deviate from this general contribution obligation. Contribution claims can be brought in the context of the principal claim or in proceedings between defendants after a judgment or settlement in the principal claim has been reached.
Is the ‘passing on’ defence allowed?
With the Implementing Act, a specific legal basis determining that parties can use the defence that the claimant passed on the higher costs caused by the competition law infringement has been formally adopted in Dutch law.
It should also be noted that before the introduction of the Antitrust Damages Directive through the Implementing Act, a passing-on defence had already been accepted in principle in a damages claim procedure following the Gas Insulated Switchgear case. In the ruling of a dispute between TenneT and ABB in 2016, the Supreme Court held that the passing-on defence can both relate to the amount of profit the claimant enjoyed as a consequence of the wrongful conduct insofar that it is reasonable and function a defence in order to reduce the amount of damage the claimant alleges it has suffered. However, the deduction from the amount of damages awarded based on passing-on must always be ‘reasonable’, which was found not to be the case in the matter between TenneT and ABB in a subsequent ruling.
Do any other defences exist that permit companies or individuals to defend themselves against competition law liability?
Defendants can use several other defences against alleged liability for damages, the most relevant being:
- force majeure;
- the infringement being the result of government compulsion; and
- the infringement being the result of complying with a statutory provision.
It should, however, be noted that these defences are raised only very rarely in actions for damages relating to competition law infringements.
Alternative dispute resolution
Is alternative dispute resolution available?
In principle, parties are free to decide to settle a dispute through arbitration. The Amsterdam District Court has, however, held in a damages claim case related to the Sodium Chlorate cartel that a general arbitration clause in a contract does not cover damage claims resulting from alleged breaches of competition law (the decision was subsequently confirmed by the Amsterdam Court of Appeal). If the arbitration clause in a contract is specifically formulated to include disputes arising from damage claims related to breaches of competition law; however, the defendant can rely on such an arbitration clause, as confirmed in a judgment of the Court of Justice of the European Union on a preliminary question from a German local court related to the same Sodium Chlorate case.
If a valid agreement on settlement of the dispute through arbitration has been reached and is relied on by (one of the) parties, the Dutch court before which a claim is brought will declare lack of jurisdiction to hear the claim.
Judges have the possibility to refer parties to a dispute to mediation. There are, however, no examples of such decisions in antitrust damages cases to date, with mediation not being a realistic option in such cases.
UPDATES & TRENDS
Updates & Trends
Updates and trends
In 2017, the Antitrust Damages Directive was implemented in Dutch law through the Implementing Act. Important changes to Dutch law as a result of this are, for example, the presumption of harm and the explicit statutory basis for the use of the passing-on defence. Currently, several proceedings in follow-on to, for example, Air Cargo, Cathode Ray Tubes and Trucks, are pending. The developments in these cases will be followed closely by practitioners.
Collective proceedings through assignment of claims to a claims vehicle has occurred more frequently in recent years. Another development that may be emerging is the practice for parties to complex and large damages actions to request pre-trial hearings, case management hearings and to request interim decisions on preliminary defences, among other things, with the aim to create more structure in these complex proceedings.